Here’s why the Bellevue Gold (ASX:BGL) share price is higher today

This ASX gold share has been in the red over the past 12 months. But that could be turning around.

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The Bellevue Gold Ltd (ASX: BGL) share price is jumped to an intraday high of $1.035 in early trade, before retreating back to $1.00 at the time of writing, up 0.5%.

Below, we take a look at the ASX gold share’s latest resource update and production forecast.

What resource update did Bellevue announce?

Bellevue Gold’s share price is gaining after the company revealed its total resources had increased by 11%. Bellevue’s total resource now stands at 3.0 million ounces of gold at 9.9 grams per tonne.

The company noted its total resource is now up 25% since February, when it completed the stage 1 feasibility study.

The ASX gold producer’s indicated resource also increased since the feasibility study. That now stands at 1.4 million ounces at 11.0 grams per tonne, up from 1.0 million ounces in February.

Bellevue Gold plans to release the results of its stage 2 feasibility study later this quarter. Taking the increased inventory into account, the company is contemplating increasing its production plant capacity from 750,000 tonnes per annum (tpa) to 1 million tpa. It expects to be able to achieve this with “minimal additional capital expenditure”.

What did management say?

Commenting on the progress, Bellevue Gold managing director Steve Parsons said:

We are advancing, growing and de-risking the project at the same time. This substantial resource increase means we have ticked an important box in our strategy to grow the forecast production rate by expanding mill throughput to 1Mtpa.

Given the surplus capacity built into the stage 1 feasibility study, we believe we can achieve this expanded throughput rate for minimal additional cost. This means we stand to generate increased free cashflow from the higher production rate and greater economies of scale, which in turn should increase the overall project economics significantly.

The company said its discussions for project funding are progressing rapidly, noting it had received 12 indicative proposals from lenders. “We expect to compile a shortlist of lenders in coming weeks,” Parsons said.

Bellevue Gold share price snapshot

The Bellevue Gold share price is down 8% over the past 12 months, compared to a gain of 27% on the All Ordinaries Index (ASX: XAO) over that same period.

Year-to-date, the Bellevue Gold share price is down 12%.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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